Beyond a joke

HALIFAX is still dragging its feet over payment of compensation to hundreds of victims of mortgage endowment mis-selling, months after Financial Mail first raised concerns about its backlog of complaints.

We have uncovered evidence that Halifax is taking up to 11 months to pay in some cases. Its poor overall handling of endowment complaints, including payment delays, could result in a fine from the Financial Services Authority.

Under FSA rules, companies must make a decision on an endowment mis-selling claim within 56 days. But for compensation, the regulator merely states that payment must be within a 'reasonable' time.

It seems clear that Halifax is exploiting this vague definition to drag its feet - a strict time limit would force the bank to put more resources into dealing with the problem.

Teresa Fritz, principal researcher at consumer lobby group Which? says: 'Once a complaint is upheld, it should be relatively straight- forward to get the redress payment into the hands of the claimant, particularly for a provider with the resources of Halifax. If it is a question of resources, Halifax can spend some of its huge profits putting things right for those customers who were mis-sold endowments instead of on glitzy marketing campaigns trying to get new ones.'

Many customers are incensed at the company's adverts fronted by Howard Brown, whose record, Barry White's You're The First, The Last, My Everything, reached number 13 in the charts.

Last year, Halifax, now part of banking giant HBoS, reported record profits of £5bn. Halifax is due to hold its annual meeting on Wednesday.

It is the biggest mortgage lender and has 550 staff working on endowment cases. Of these, only 130 are responsible for calculating payments and ensuring they are made. The bank says it is working towards a three-month turnround in payments from the date a claim is upheld.

But Nigel Wharton, 47, an engineer from Oxford, complained to Halifax about his endowment 13 months ago and his case was upheld last June.

Since then, Nigel, married with three stepchildren, has received only two letters from Halifax about his complaint. He has had no compensation, nor has he been told how much he will eventually receive.

'Halifax has a responsibility to sort out my situation,' he says. 'My case is getting beyond a joke. When I call Halifax, I'm just told there is a backlog in payments and it will be dealt with. But an 11-month wait is unacceptable.' Nigel was sold the endowment by a Halifax adviser in 1988 to cover a £32,000 mortgage. However, recent forecasts estimate that the policy could fall short by as much as £15,000.

'When I see Halifax adverts telling the world how good it is, it makes my stomach turn,' he says. 'I've been treated with disdain and I certainly won't be buying any more of its financial products.'

Colin Angell, 58, a telesales worker from Hull, is disgusted with the attitude of Halifax. He complained in January about the mis-selling of two endowment policies bought in Halifax branches. One is with Norwich Union, the other with Standard Life.

The Standard Life policy was sold by an adviser representing the insurer, so Halifax passed Colin's complaint on to Standard. But the complaint relating to his Norwich Union endowment was dealt with by Halifax.

Colin found the difference in service 'mind-blowing'. 'Standard Life upheld my complaint on February 11,' he says. 'Less than two weeks later I received compensation. Halifax took until March to uphold my complaint, but I'm still waiting for compensation.'

He has run up against a brick wall trying to get payment. 'The last time I called Halifax, I was told I could not speak to anyone in the compensation division and that I had to e-mail,' he says. 'Yet when I asked for the e-mail address, Halifax refused to give it to me.'

Leisure consultant John Knowles, 62, and his wife Wendy, from Grantham, Lincolnshire, have been waiting only one month for compensation since being told they had been mis-sold a Scottish Mutual endowment linked to a Halifax interest-only mortgage.

But after the experience of other Halifax complainants, he has no faith that the bank will pay his claim soon. 'When I called Halifax last week, someone told me that they wouldn't get round to calculating the redress I am owed for at least another three months,' says John. 'My feeling is that it's going to be a lot longer than that.'

Though Halifax told Financial Mail last week that it was determined to cut payment delays to three months, it offered no apology. Instead, the bank preferred to blame delays on third parties such as insurance companies and other lenders.

Spokesman Mark Hemingway said: 'The major delays tend to arise where in the calculation of specific redress we are required to contact multiple lenders because a borrower has regularly moved their mortgage. We need information from all these lenders before we can calculate exact compensation.'